Top negotiators for President Joe Biden and Speaker Kevin McCarthy resumed talks Friday evening to lift the nation’s borrowing cap, ending a “pause” put in place hours earlier when Republicans expressed frustration with the White House position.
After a nearly daylong setback, White House Counselor Steve Ricchetti, White House budget director Shalanda Young, Rep. Garret Graves, R-La., and House Financial Services Chairman Patrick T. McHenry, R-N.C., resumed talks at the Capitol shortly after 6 p.m.
But McCarthy vented his frustration with the Biden administration in a Fox Business interview that marked a clear change in tone from just a day earlier.
“I think we could probably write a pretty good agreement to be able to move forward, but the White House will not budge,” the California Republican told Fox. “We’ll be back in the room tonight, but it is very frustrating. They want to come into the room and think we’re going to spend more money next year than … we did this year. That’s not right and that’s not going to happen.”
House Republicans have pushed for a decade of caps on discretionary spending, which would revert to fiscal 2022 levels next year and then allow for 1 percent annual growth. Democrats have slammed the proposal, saying it would gut critical domestic programs because the GOP would not cut defense, which makes up roughly half of all discretionary spending.
The dust-up marked only the latest skirmish in a partisan standoff that has dragged on for months over how to raise the debt limit to avoid a breach when the government’s borrowing authority runs dry. Treasury Secretary Janet L. Yellen has warned the so-called x date could hit as early as June 1.
Graves, McCarthy’s chief proxy in the debt talks, walked out of the negotiating room late Friday morning, saying, “We decided to press pause because it’s just not productive.”
He said the House passed a “strong bill” to pair a debt limit increase with spending reduction measures, but the White House didn’t appear to be moving toward their position.
“Until people are willing to have reasonable conversations about how you can actually move forward and do the right thing, we aren’t going to sit here and talk to ourselves,” Graves said in video posted on Twitter by a CBS reporter.
McCarthy, who arrived at the Capitol after negotiations broke down earlier in the day, confirmed his outlook for a deal had soured since hopes were raised on Thursday.
“Yesterday, I really felt we were at the location where I could see the path,” McCarthy told reporters in a brief appearance. “The White House is just — look we can’t be spending more money next year. We have to spend less than we spent the year before. It’s pretty easy.”
He said he spoke with Graves Friday but not with Biden, who is in Japan for a meeting of the seven leading industrialized nations.
“There are real differences between the parties on budget issues and talks will be difficult,” a White House official said after Friday’s talks broke up. “The president’s team is working hard towards a reasonable bipartisan solution that can pass the House and the Senate.”
In recent days, both parties’ leaders have faced pushback from their left and right flanks. Some Democrats have said Biden should simply invoke the Public Debt Clause of the Constitution’s 14th Amendment and continue to borrow despite reaching the limit, in order to prevent spending cuts they oppose.
Meanwhile, members of the ultra-conservative House Freedom Caucus have said there shouldn’t be any talks since the Senate hasn’t been able to pass debt limit legislation.
The latest data released by Treasury on available cash and “extraordinary measures” used to stay under the $31.4 trillion borrowing cap demonstrate the extent to which the federal government’s financial position has already deteriorated.
Combined, Treasury cash and extraordinary measures have dipped by more than one-third over the past week. Available extraordinary measures increased slightly over the week ending May 17, Treasury reported, to $92 billion. But Treasury’s cash on hand dropped precipitously, to about $57 billion on Thursday.
Lindsey McPherson contributed to this report.
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